Carol McAtee's Blog

From our CPA office in St. Petersburg, FL – Beginning in 2012, taxpayers may receive a rebate on amounts spent for health insurance. Under the new health care law, health insurers who do not meet the new requirements for medical loss ratios are required to provide annual rebates to policyholders. Medical loss ratios essentially reflect an insurer’s profit margin.

These new rebates may be taxable to taxpayers. If in 2011, a taxpayer deducted premiums paid for health insurance as either an itemized deduction or as a self-employed health insurance deduction, any rebate received may need to be included in your 2012 gross income. This applies whether the rebate was received in cash or as a premium reduction. However, taxpayers who did not deduct health insurance premiums are not subject to federal income tax on the rebates.

Contact us to insure all your tax filings are correct and timely. As tax professionals, McAtee & Associates can help both individual and business taxpayers with all their tax matters.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From our CPA office in St. Petersburg, FL – One in eight people earning at least $1 million annually was audited by the Internal Revenue Service last year, a much higher rate than for individuals earning less than $200,000 where just 1 in 100 had their income tax returns examined.

Additionally, the 12 percent of millionaire earners audited in 2011 was significantly higher than the 8 percent audited in 2010. The IRS contends that the increasing percentage was part of an effort to demonstrate the fair application of the tax laws. The IRS wants to assure lower income taxpayers that those at the upper end are subject to the same rules and enforcement practices. Between 2004 and 2009, the percentage of millionaire earners audited ranged between 5 and 7 percent.

IRS audit data is divided into three income categories: below $200,000, $200,000 and above, and $1 million and higher. About 1 in 25 people earning above $200,000 was audited in 2011. A greater proportion of large corporation were audited compared to smaller ones. Many times, taxpayers that are selected for audit end up paying additional taxes.

If you received an audit notice from the IRS, contact us for assistance. As tax professionals, McAtee & Associates can help taxpayers through the difficult audit process in a timely manner. Contact us for assistance in all of your financial and tax matters.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee’s CPA firm in St. Petersburg, FL- Our final tip for FIling Amended Returns:

8. If you owe additional 2011 tax, file Form 1040X and pay the tax before the due date to limit interest and penalty charges that could accrue on your account. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.

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If you have questions about filing an amended return or other tax related questions, please do not hesitate to contact us 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee’s CPA firm in St. Petersburg, FL-

7. If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.

If you have questions about filing an amended return or other tax related questions, please do not hesitate to contact us 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee’s CPA firm in St. Petersburg, FL-

6. If the changes involve another schedule or form, you must attach that schedule or form to the amended return.

If you have questions about filing an amended return or other tax related questions, please do not hesitate to contact us 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee’s CPA firm in St. Petersburg, FL-

5. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS campus. The 1040X instructions list the addresses for the campuses.

If you have questions about filing an amended return or other tax related questions, please do not hesitate to contact us 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee’s CPA firm in St. Petersburg, FL- Continuing with our 8 Facts about Filing Amended Returns:

4. Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.

If you have questions about filing an amended return or other tax related questions, please do not hesitate to contact us 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee’s CPA firm in St. Petersburg, FL-

3. Generally, you do not need to file an amended return to correct math errors. The IRS will automatically make that correction. Also, do not file an amended return because you forgot to attach tax forms such as W-2s or schedules. The IRS normally will send a request asking for those.

If you have questions about filing an amended return or other tax related questions, please do not hesitate to contact us 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee’s CPA firm in St. Petersburg, FL- Yesterday we started a blog series about Filing Amended Returns. Today we continue that series with fact #2:

2. An amended return cannot be e-filed. You must file a paper return.

If you have questions about filing an amended return or other tax related questions, please do not hesitate to contact us 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

From Carol McAtee’s CPA firm in St. Petersburg, FL- What if you’ve already filed your return, but realized that you were eligible for a deduction or credit that you didn’t take, or worse–discovered an error and need to “fix it” on your return?

Fortunately, there’s an easy answer: file an amended return. Here’s what you need to know if you’re considering filing an amended federal income tax return.

1. When you need to amend an income tax return, use Form 1040X, Amended U.S. Individual Income Tax Return. You can use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ.

If you have questions about filing an amended return or other tax related questions, please do not hesitate to contact us 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.